The following table presents selected 2016 annual income statement items and balance sheet items for Toyota Motor

Question:

The following table presents selected 2016 annual income statement items and balance sheet items for Toyota Motor and Apple. All dollars are in millions. Use the information to answer the questions that follow.

a. Calculate and interpret the length of the operating cycle for Toyota and Apple.

b. Calculate and interpret the length of the cash conversion cycle for Toyota and Apple.

c. What are the advantages and disadvantages of Apple?s way of running operations compared to Toyota?s way?

Cash Conversion Cycle
Cash conversion cycle measures the total time a business takes to convert its cash on hand to produce, pay its suppliers, sell to its customers and collect cash from its customers. The process starts with purchasing of raw materials from suppliers,... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...

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